South Africans working from home and co-working spaces are beginning to affect the property market

The trend towards a remotely based workforce has already resulted in a number of studies on the effect its having on the commercial property market.

However, statistics are beginning to show that the impact is very real, according to Leon Breytenbach, national manager of the Rawson Property Group’s commercial division.

While working remotely is said to improve productivity as well as the contentment of the employee while decreasing company expenditure, the negative effect on the commercial property market is of concern to both investors and commercial property agents, he said.

“Perusal of the SAPOA Office Vacancy Reports shows that office vacancy figures have not decreased since the last report and could continue escalating in the future.

“This is not good news for the investor who owns multiple office buildings. Another point to consider is that not all remotely based employees operate from their homes. In fact, many opt for shared or co-working spaces, coffee shops or restaurants.

“The reasons for this seem to be that remotely based employees frequently suffer from cabin fever when confined to their homes, day in and day out, seldom interacting with others. Another logical reason may be that it is difficult to work without distraction or interruption in the home environment,” he said.

Based on these vacancy statistics, Breytenbach said that existing and potential investors should begin to view this trend in a serious light as it is already impacting on the demand for commercial property, in a serious light.

“Existing commercial property investment portfolios, as well as anticipated investments, require careful examination in order to gauge their spatial flexibility. Commercial property investors are advised to review their portfolios by evaluating each investment for its compatibility with the shared workspace concept,” he said.

“The fastest growing sector of the co-working market is made up of large corporates, many of which prefer short-term real estate contracts with flexible provisions. An ever-growing number will not consider leasing premises unless the building also offers flexible extra space.”

However, Breytenbach added that it was unlikely that traditional offices will be completely replaced.

“It is unlikely that working from home or coffee shops will replace the need for traditional offices in the foreseeable future,” he said.

“The adverse effect of remote or shared office space on the commercial property market is a very real concern, yet it is equally reassuring that with a little effort and out-of-the-box thinking, the negative can be turned into an economically rewarding positive,” Breytenbach said.